Business backing for George Osborne's spending cuts

  • Published

The leaders of 35 of the UK's biggest companies have expressed their support for the government's plans for spending cuts running into billions of pounds.

The bosses of Marks and Spencer, BT and GlaxoSmithKline are among those to have signed a letter to the Daily Telegraph.

They write it would be a "mistake" for Chancellor George Osborne to water down his programme for reducing the budget deficit in Wednesday's Spending Review.

Labour dismissed the letter as "politically motivated".

'Decisive way'

Writing to the Daily Telegraph, the bosses said there was no reason to believe Mr Osborne's approach would undermine any recovery.

They said: "Addressing the debt problem in a decisive way will improve business and consumer confidence.

"Reducing the deficit more slowly would mean additional borrowing every year, higher national debt, and therefore higher spending on interest payments."

"The private sector should be more than capable of generating additional jobs to replace those lost in the public sector," the signatories also claim.

BBC business editor Robert Peston says that Mr Osborne could not be happier that a group of influential people, such as the 35 business leaders, has at last come out and said they want him to make the deep public spending cuts that he has been promising.

However, some people would point out that these bosses may be experts at running businesses but that does not make them experts at how best to manage the economy, our correspondent adds.

Chequers talks

Robert Peston said in his blog post on the cuts that some of the signatories - such as Next chief executive Lord Wolfson and Paul Walsh of Diageo - were widely viewed as Conservative supporters.

But he said the intervention of others, including BT chief executive Ian Livingston and Asda chairman Andy Bond, would be seen as more surprising.

In Wednesday's Spending Review, Mr Osborne will outline which areas of Whitehall's budget will be hit the hardest, as the government attempts to reduce the £155bn deficit. He has promised to see through the government's programme - designed to save £83bn over four years - saying it will "get us out of this stronger".

Ministers are understood to have agreed an 8% cut in the Ministry of Defence's £37bn budget following tense negotiations as well extra financial support for social care in England and Wales and new sanctions to deal with benefit cheats.

Labour unveiled its own plans for the economy on Monday, shadow chancellor Alan Johnson saying he wanted a greater share of money for cutting the deficit to come from tax rises rather than spending cuts.

Mr Johnson said the letter from the businessmen was a misguided attempt to convince people there was no alternative to the coalition's plans.

"I think it is a bit sad," he said, suggesting the letter had been "organised" by a Conservative supporter. "It is politically motivated from Conservative Central Office."

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